Not guilty plea in Dixon case: expert urges public to be aware of fraud

Former Dixon comptroller Rita Crundwell pleaded “not guilty” in federal court in Rockford Monday. She’s accused of stealing 53-million dollars from her hometown over the past 20 years.

Crundwell’s plea was entered by one of her two court-appointed public defenders. Federal Magistrate P. Michael Mahoney has asked for Crundwell’s financial records to determine if she qualifies for free representation because he has frozen most of her assets. Her attorneys have about five weeks to go over the 11-thousand pages of evidence federal prosecutors have submitted in the case.

Retired fraud investigator and author Thomas Golden lives just north of Dixon, in Oregon, Illinois. He attended Monday’s hearing and says the public needs to work harder to prevent fraud. He says fraud cases like this are happening in governments and not-for-profit agencies everywhere: "Trust, yes, but verify? That is what people do not do. They don't do the verification part. They simply trust. And if there's a con-artist that they trust, they're gonna end up a victim."

The federal government has also filed a civil lawsuit against Crundwell, to take possession of her 311 horses. Status hearings on both cases are scheduled for June 15. Crundwell, her attorneys, and prosecutors all declined to comment after Monday's hearing.

DIXON — Rita A. Crundwell, the Dixon city comptroller who was arrested Tuesday on a federal charge of defrauding the City of Dixon of more than $3.2 million in public funds since last fall, was released from federal custody Wednesday. Her freedom while she awaits trial, however, rests on a number of conditions agreed upon by her attorneys, federal prosecutors, and federal magistrate P. Michael Mahoney.

The city of Dixon may be out 20-million dollars more than originally thought in the case against its former comptroller. Federal prosecutors have now charged Rita Crundwell with stealing 53-million dollars over the past 22 years. In the original complaint against Crundwell, she was accused of embezzling an estimated 30-million since 2006 to “support her lavish lifestyle.”

Dixon Mayor James Burke held a news conference Wednesday morning in Dixon, Ill., to address several issues regarding the arrest of City Comptroller Rita A. Crundwell on a federal charge of misappropriating $3.2 million in city funds.

Burke thanked the FBI for its efforts and ann0unced that Crundwell is suspended without pay pending resolution of the charges against her. He said he "literally became sick to my stomach" while meeting with agents on the case.

The mayor declined to answer any questions from reporters in attendance, including WNIJ's Susan Stephens. Here is the text of Mayor Burke's statement: